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27 December, 10:55

Andre Company does not segregate sales and sales taxes when it charges customers at the register. Its register total for a given day is $5,724, which includes a 6% sales tax. How much should be recognized as sales revenue and sales taxes payable, respectively?

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  1. 27 December, 14:32
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    Sales revenue is $5,400

    Sales tax payable is $324

    Explanation:

    The computation of the sales revenue is shown below:

    = Total cash received by the company : (1 + sales tax rate)

    = $5,724 : (1 + 6%)

    = $5,724 : 1.06

    = $5,400

    Now the sales tax payable would be

    = Total cash received by the company - sales revenue

    = $5,724 - $5,400

    = $324

    Simply we find the sales revenue by considering the sales tax rate and the difference of cash received and sales revenue represent the sales tax payable amount
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